Carriers banking on cars to drive 5G, rev up a new growth engine



From connecting all of the people to connecting all of the cars. As we noted earlier, car companies have a much bigger presence at this year’s Mobile World Congress tradeshow.

Wander the flashy hall 3, where smartphone makers have traditionally bagged most of the prime carpet-space to show off their latest glass slabs, and you’ll find a sprawling Ford booth and — everywhere you turn — another parked car being used as a prop by carriers and chipmakers keen to flog the 5G-plus-IoT future.

In hall 4, where in years past most of the space used to be given over to an elaborate free conference lunch, the GSMA now has a showcase touting IoT, and a minimalist exhibition space for Peugeot’s new concept car. Its self-driving slogan? ‘Augmented freedom’.

Passing this booth I overhear two grey-haired businessmen chatting. “It’s amazing that you find cars in this place,” says one to the other. “I suppose it’s all the IoT stuff in the cars,” he responds as they walk on without breaking stride.

The reason for all these fancy cars sitting idle at the world’s biggest mobile phone show is indeed simple: the smartphone market is facing saturation point. So even as former global mobile leader Nokia seeks to revive its iconic brand to retrotastically connect people again, the big scramble now is to connect things. Lots and lots of things.

And what’s the next best target when you can’t rely on big growth from connecting more people? Why, connecting cars. As many of the billion+ of them that you can…

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Wearables have never looked like another smartphone-sized phenomenon, and are looking more like a niche health or fitness category every passing quarter. While tablets were quickly cannibalized by phones with bigger screens. And while some carriers have been toying with novel ideas like connected toys for kids (TC parent AOL’s parent Verizon is an investor in Toymail, for example), this sort of niche will live happily on Wi-Fi — at least when the category isn’t being mired in security issues

Which just leaves cars as the most obvious thing for operators and chipmakers to focus on for selling more connectivity.

Softbank CEO Masayoshi Son, who last year acquired chipmaker ARM, took a turn on the MWC stage to talk up the prospect of the Singularity turning driverless cars into superintelligent four-wheeled robots within 30 years. Because of course he wants his company to be installing as many of the trillion chips he can which he reckons are coming down the pipe.

In another session here, Ola’s Ankit Jain described how the Indian ride-hailing startup is trying to differentiate its business from typical taxis by launching a personalized entertainment experience called Ola Play which automatically syncs users’ music preferences when they get into an Ola car. And while it’s using retrofitted tablets to power the offering, the impetus to turn cars into connected ‘entertainment pods’ is clear.

Add in the prospect of driverless cars in future and the car becomes even more of an entertainment hub. How are you going to kill all that driverless time? Why by streaming movies, chatting with friends, listening to music, browsing the Internet etc, etc.

And that’s just the tip of the connected car vision: connected cars will also be talking to connected cars and to other connected objects — to share data on road conditions, for safety, for navigation, and so on.

At least they will so long as the network coverage is there. Hence the carrier pitch for upgrading 4G/LTE networks to 5G. In a session yesterday on ‘building the 5G economy’, Orange’s CEO and chairman, Stéphane Richard, touted the next-gen network tech as having “much wider coverage” and ultimately enabling a “smarter society” with improved “public safety”.

Cars might be what tablets could not be for carriers.

“At some point we can all imagine a world of cars communicating with each other and red light will become useless,” he said, suggesting, for example, that connected cars plus 5G will lead to fewer traffic jams — thanks to the added layers of connectivity as connected cars speed through connected cities.

“All of the cities, social ecosystem infrastructure will be connected,” added Son on Monday. “All those things will be connected. All connected securely and managed from the cloud.”

“Cars might be what tablets could not be for carriers,” suggests Gartner analyst Carolina Milanesi. “Connected cars play a big role in the whole 5G roll out which is why both chipset vendors and carriers are talking about it.”

“When it comes to cars the interesting part for me is that network need will not just come from the sensors — as well it’s entertainment. I have an LTE car in the U.S. that is my daughter’s dream as she can now be connected when we go for long drives. 5G will allow for that experience to be much richer than it is today, although I’m not sure if necessarily cheaper.”

“It will be interesting to see how they price it,” she adds. “For instance I pay $10 a month for 2GB which is gonna go very fast if you stream.”

And with European carriers finally having to hang up on roaming costs this June, the prospect of a new type of streaming data plan with accelerated revenue potential will surely be music to their ears.



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